The group reported today a pre-tax profit for the six months of £7.2m against £8.8m for the same period of last year.

Chairman Cameron McLatchie said the rise in turnover to £266m against £226m was entirely due to higher costs which were largely passed on to customers.

Business performance saw the group’s agricultural business perform well with good growing conditions while industrial and building markets were down.

Overall, sales in the UK and Europe amounted to 172,000 tonnes, unchanged from the same period of last year.

With price pressures mounting, taking LDPE to more than £1,250 in August, energy costs up nearly 50% and some of its UK operations producing unacceptable margins, BPI is looking for further rationalisation. McLatchie warned, “We are examining all options.”

After spending £7.7m on capital investment during the first half year, ahead of depreciation, ceo John Langlands noted, BPI has not authorised any significant items since February.

Langlands said: “The second half performance looks very challenging with the record raw material prices, highest ever energy costs and reducing construction activity.”

But he added: “However sales of silage stretchwrap have continued during July and August due to good growing conditions in the UK and Scandinavia.

“The second half performance is dependent on our ability to recover the higher raw material and energy costs and normal levels of activity in our non construction activities.”

BPI’s shares were marked up by some 3.5% on the results this morning.